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Unlike other fiscal battles such as over raising the debt limit or keeping the government open and funded, the consequences from the sequester are more likely to be gradual.

“Sequestration takes place over time, furloughs take place over time, spending cuts take place over time,” Bernanke told senators. “I wouldn’t expect to see a big impact immediately.”

Bernanke said he would expect to see the effects build over the course of several months.

The chairman warned that the current focus on reducing the deficit and debt now rather than putting in place a plan where new tax and spending policies would take place in later years is working against the Fed’s effort to stimulate the economy through a massive bond buying program.

“In terms of the near term recovery, I think there is a sense in which monetary and fiscal policy are working at cross purposes,” he told the committee. “The fiscal decisions being made are mismatched with the timing of the problem. The problem is a longer term problem and should be addressed over a longer timeframe.”

Bernanke also warned that any hijinks over extending the continuing resolution funding the government, which goes through March 27, or raising the debt limit later this year will hurt the economy because it will add more uncertainty.

That uncertainty, Bernanke said, is “costly in terms of the ability of the private sector to plan and take risks and to help grow the economy.”

A handful of senators from both parties sparred with Bernanke at various points in the two-hour session.

Sen. Bob Corker (R-Tenn.) accused the Fed of stimulating a global currency war and argued that the central bank’s policy of keeping interest rates low hurt people who had saved their money, particularly seniors.

“Do you all ever talk about the longer-term degrading effect of these policies as we try to … live for today?” Corker asked Bernanke.

Bernanke replied that his concern was on employment and that raising interest rates in the current state of the economy would not be sustainable.

“My inflation record is the best of any Federal Reserve chairman in the post-war period, at least one of the best,” Bernanke said to Corker. “We have worked on both sides of the mandate and we’re trying to achieve a stronger economy for everybody.”

And Sen. Elizabeth Warren (D-Mass.) pressed Bernanke on “too-big-to-fail” financial institutions — a line of questioning that earned praise from an unusual ally: conservative Sen. David Vitter (R-La.).

Warren pressed the Fed chairman about a recent Bloomberg View column that argued large banks receive a de facto $83 billion taxpayer subsidy because they enjoy lower funding costs because of investors’ belief they will be rescued by the government if they fail.

Bernanke, a Republican, found himself defending aspects of President Barack Obama’s 2010 Dodd-Frank Wall Street reform law to Warren and others, arguing they should alleviate any concerns about “too-big-to-fail.”

When Warren pressed him again about the column, Bernanke said: "Well that's one study, senator, you don't know whether that's an accurate number."

This article first appeared on POLITICO Pro at 10:00 a.m. on February 26, 2013.